Did you know that 61% of late payments are due to invoicing errors? An invoice error can cause cash flow issues and customer service problems for your business. They can also wreak havoc on your inventory numbers.
An invoice reconciliation process catches those errors before they become problems. It also helps you reduce fraud and maintain accurate books.
Are you ready for smart management tips for small business owners? Read on to learn about invoice reconciliation and improve your company’s cash flow.
Send Invoices On Time
Business ownership isn’t easy because there are so many things to manage. You need to generate revenue, hold employees accountable, and manage customers.
Those things lead to invoices getting sent late. It’s smart management to use tools to simplify processes. It’s even smarter to use free tools.
Use a free invoice template that lets you create a professional business invoice in just a few minutes.
Use Accounting Software
Accounting software has the tools you need to reconcile invoices. You can also reconcile bank statements and
You can see which invoices are still outstanding and spot invoicing or payment errors. Accounting software automates some of the processes for you, which makes business ownership a little easier.
Check Incoming Orders
How do you prevent inventory issues? Reconcile shipments and invoices the moment the order gets received at the dock.
You’ll need to have systems in place to ensure the order received matches the invoice.
Have employees count the items received and enter them into your inventory system. Reconcile that against the invoice to make sure you’re not paying for items that you didn’t get.
Put Simple Processes in Place
It only takes a minute to reconcile a payment with an invoice. Yet, businesses don’t have a process in place to take this simple action.
You could discover that a vendor underpaid or overpaid you. You can resolve the issue immediately just by having a payment verification process.
Another process to put in place is to check the invoices before they get sent to customers. Check the invoices against the contract or purchase order for accuracy.
One small typo could cause a customer service issue. You can save yourself these headaches by putting these preventative measures in place.
Ask Questions When Things Don’t Match
You don’t need to assume that there are fraudulent activities in your business if something doesn’t line up. There are other possible reasons why an invoice and payment don’t match up.
Your payment processor could charge fees. The customer could have received a discount that’s not reflected on the invoice.
The customer could have an agreement to make installment payments.
You’ll want to find out if these circumstances exist first. If they don’t, you’ll need to investigate the issue further.
Invoice Reconciliation Is Smart Management
It’s smart for management to have an invoice reconciliation process in place. You’ll be able to improve your cash flow, avoid customer service issues, and identify fraud.
Leverage these tips to put an invoice reconciliation process in place. You’ll be a smart small business owner.
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